Cities will be hit hardest by shortfalls in EU migration – the Government’s new immigration system needs to reflect this

Last week the Government announced a new temporary visa scheme to help fruit farmers avoid labour shortages, by enabling them to recruit up to 2,500 agricultural workers from outside the EU each year.

Given that the seasonal workforce of British farms is almost entirely made of workers from Eastern Europe, the scheme suggests a recognition by the Government of the need to prepare for the fall in EU migration to the UK as we prepare for Brexit.

However, as the findings of our recent reportWith or Without EU suggest, this initiative will do very little to address the most pressing post-Brexit labour challenges that places and businesses face as we leave the EU.

In particular, the report highlights three issues which should be key considerations of the Government as it designs it’s post-Brexit immigration system:

1. EU migration to the UK is largely an urban phenomenon

While rural firms such as fruit-farms will be severely affected by a fall in EU migration, in aggregate it is businesses in cities that will face the greatest challenges when it comes to post-Brexit recruitment. As our report showed, more than two thirds of EU migrants are located in cities, with London alone accounting for 37 per cent of all EU migrants in England and Wales.

Migrants tend to come to our cities because of the economic opportunities these places provide. And if the numbers of EU migrants coming to the UK continues to fall, urban employers will face particularly severe labour shortages. For example, in cities, one in every ten workers in the hospitality sector comes from the EU and this is much higher in Cardiff, Cambridge and London.

2. A sectoral approach to migration does not take into consideration the variation across places

While nationally some industries rely on EU workers more than others, a sectorial approach does not take into consideration how the reliance on migrant labour varies across places. For example, in Cardiff, the hospitality sector is the most reliant on the EU workforce, which account for one every three jobs in the sector, while in Northampton it was logistics (one every six).

In certain places, reliance on EU workers is spread more equally across sectors. In Cambridge, EU migrants account for more than 15 per cent of workers in four sectors: hospitality (22 per cent), finance (19 per cent), admin and support activities (17 per cent) and professional services (16 per cent). Similarly in London, three sectors — hospitality (20 per cent), admin and support activities (16 per cent) and construction (16 per cent) — rely heavily on the EU workforce. These factors illustrate the inadequacy of a sectoral-focused approach to addressing the EU labour shortages that places could face post-Brexit.

3. EU migrants do not only work in low-skilled industries

It is not just predominantly low-skilled industries like farming that rely on EU workers. In London and Cambridge, one every ten workers in professional services come from the rest of the European Union and these tend to be high-skilled jobs. And this means that the new migration system after Brexit should recognize the economic importance of both high-skilled and low-skilled migrants.

It’s great that the Government has recognised the impact that immigration restrictions will have on fruit picking and has moved to address this. But the much bigger challenge is for businesses in UK cities.

Having acknowledged the role that migrants play, it needs to move to mitigate the impact of restrictions on economies of our cities too. Our report offers ideas on how to do this – from extending Freedom of Movement for the next two years at least, to removing current caps on both high-skilled and low-skilled workers. These factors need to be key considerations for the Government in its upcoming white paper on post-Brexit immigration.